“A couple [of clients]have [had]questions about whether there’s more left” to the surge in corn prices, said Dave Chojnacki, market technician at Street One Financial “I told them, it’s had a big run, and it’s going to meet some resistance unless something else pushes them higher.” [Ag ETFs May Rally More on Drought: Teucrium Investment Chief]
Don’t forget that last week, the U.S. Department of Agriculture estimated that corn production would fall 12% in July.
Reasons investors hold commodities in their portfolios include diversification benefits, a hedge against inflation and overall price speculation. [How Record Corn Prices Are Affecting Food-Related ETFs]
CORN is the only fund that holds futures contracts for corn specifically. Other ETFs that benefit from this run-up in prices, but mitigate the risk of a single commodity include:
- PowerShares DB Agriculture Fund (NYSEArca: DBA) includes corn, wheat, sugar and soybeans
- iPath Dow Jones UBS Agriculture Sub-Index ETN (NYSEArca: JJA)
- Market Vectors Agribusiness (NYSEArca: MOO)
Tisha Guerrero contributed to this article.